Exhibit 10.23  







Contract of Employment 




This Agreement made and entered into by and between 




Data I/O GmbH 

Lochhamer Schlag 5

82166 Grafelfing, Germany

(hereinafter: Company) 






and 





Mr. Harald Weigelt 

Untermaxkron 19b

82377 Penzberg, Germany

(hereinafter: Managing Director) 




     Mr.            Weigelt became appointed Geschäftsführer of the Company on December
          23, 1999 . Therefore, this Agreement shall set forth all terms and conditions of
          his employment as of December 23, 1999 with Data I/O GmbH; it replaces all
          former agreements made between the parties or their predecessors, successors or
          assigns: 



Article 1

Managing Director’s Duties 



	(1)  	  	                The
Managing Director shall be entitled and obligated to represent the Company
               in compliance with the laws, the Articles of Association, and — if
               available — the Management’s Rules of Procedure. The Managing
Director                shall not be exempted from  


















2 








	  	
the
restrictions of Section 181 of the German Civil Code (§ 181 Bürgerliches
Gesetzbuch). The Company has the right to appoint a further Managing Director.  






	(2)  	  	Within
the framework of his management and representation, the Managing Director
               shall observe the resolutions of the shareholders ́ meeting.  






	(3)  	  	The
Managing Director shall be obligated to manage the Company’s affairs in
               accordance with the principles of a prudent businessman.  






	(4)  	  	The
Managing Director shall be obligated to arrange for preparation of the
               Company’s balance sheet within the Data I/O Corporation
               (“DATA I/O”) reporting schedule after the end of the
respective                business year and to perform all acts and make all declarations
which are                necessary therefor.  






	  	
The
Managing Director shall be obligated, promptly after submission of the balance sheet, to
send the same together with the notice of a shareholders’ meeting to the Company by
registered letter with return receipt.  






	(5)  	  	The
Managing Director shall report to the Vice President, Worldwide Sales and
               Service of DATA  I/O or other appropriate official as designated by
the                Company or the shareholders meeting. The Managing Director shall at
all times                keep the shareholders promptly and fully informed of the
business affairs of the                Company in compliance with the group’s
general policy and shall provide                additional information if required by the
shareholders. 






	(6)  	  	The
Managing Director shall be obligated to perform the employer’s duties
               for the Company, in particular to ensure that the wage and salary tax and
social                security contributions are paid in due time.  






	(7)  	  	The
Company shall indemnify and hold the Managing Director harmless from any
               applicable German taxes due from the Company which have not been paid by
the                Company or its predecessors, successors or assigns, and from any
actions                occurring prior to the appointment of the Managing Director as the
Managing                Director of the Company.  


















3 








Article 2 

Limitation of Management 





For all transactions going beyond the
ordinary course of business, the Managing Director shall obtain prior approval of the
shareholder according to the then-current DATA I/O rules of authorization. This shall
apply, in particular, to the 



	2.1.  	  	determination
and variation of the long-term business policy of the company,  






	2.2.  	  	granting
of guaranties and other securities to third persons,  






	2.3.  	  	acquisition
and sale of business operations and parts of business operations,
               establishment and closure of places of plants,  






	2.4.  	  	acquisition,
sale and encumbrance of shares in other companies,  






	2.5.  	  	conclusion,
alteration or termination of contracts for the acquisition or sale                of
industrial property rights (patents, patent applications, trade-marks),
               secret processes, business secrets, know-how and equivalent rights as well
as                the conclusion, the alteration and the termination of license
contracts,  






	2.6.  	  	conclusion,
alteration or termination of inter-company-agreements,  






	2.7.  	  	complete
or partial dislocation of development and production of products and
               software, which are made by the Company or its affiliates in Germany,  






	2.8.  	  	execution
of the power of control vis-a-vis affiliates and execution of
               voting-rights in affiliates, in particular appointment and revocation of
               managing directors, conclusion, alteration and termination of their
service                agreements, adoption of the annual statement of account and any
decision                concerning the appropriation of profits,  






	2.9.  	  	the
taking and granting of loans, except for loans which are necessary for the
               current business operations,  






	2.10.  	  	the
acquisition, sale and encumbrance of real property and equivalent rights,  






	2.11.  	  	hiring
of permanent employees exceeding the annual budget plan for the Company,  




















4 








	2.12. 	  	contracts
with shareholders and their relatives,  






	2.13. 	  	salary-increases
exceeding the annual budget plan for the Company,  






	2.14. 	  	bonus
payments exceeding the annual budget plan for the Company,  






	2.15. 	  	disposition
of goods of the Company with a book value of more than           DM 100,000. — ,  






	2.16  	  	the
granting and revocation of "Prokura" or commercial signing rights. 







Article 3 

Second Occupation, Prohibition of Competition 



	(1)  	  	The
Managing Director shall devote his full working capacity to the Company. The
               Managing Director shall not be entitled to engage in a second occupation
which                interferes with the Company’s interests without the shareholders’               express
approval given through shareholder resolution.  






	(2)  	  	The
Managing Director agrees that he will not, directly or indirectly, during
               his employment and for a period five (5) months from the date on which his
               employment with the Company terminates or this Agreement expires for any
reason                (the “Term”), directly or indirectly be employed by, own,
manage,                operate, join, control or participate in the ownership,
management, operation or                control of or be connected with, in any manner,
any person or entity engaged in                competition with Company, Data I/O or its
subsidiaries with respect to any                product or service sold or activity
engaged in by Company, Data I/O or its                subsidiaries (including without
limitation, products or services used in the                “IC Programmer Products
Market” as defined below) up to the time of                expiration or termination
of this Agreement in any geographical area in which at                the time of
expiration or termination of this Agreement such product or service                is
sold or activity is engaged in. “IC Programmer Products Market”               means
the design, development, manufacture, sale or distribution of any device
               or system used to program programmable integrated circuits. The Managing
               Director shall be deemed to be connected with such business if such
business is                carried on by a partnership, corporation or association of
which he is an                employee, officer, director, shareholder, partner, member,
consultant or agent;                provided, however, that nothing herein shall prevent
the purchase or ownership                by the Managing Director of shares which
constitute less than five percent (5%)                of the  



















5 







	  	
outstanding
equity securities of a publicly-held corporation, or shall prevent the Managing Director
from being connected with any such business if less than five percent (5%) of such
business’ revenues relate to the “IC Programmer Products Market” and if
the Managing Director is not in any manner associated with the portion of such business
generating such revenues.  






	  	
If
the Managing Director breaches this non-competition commitment, the Managing Director
hereby covenants with the Company to pay in each instance of breach a contractual penalty
of DM 30,000. — . In case the breach is continued, the contractual penalty will have
to be paid whenever a calendar month begins. The Company reserves its right to claim for
higher damages accrued.  






Article 4 

Remuneration 



	(1)  	  	The
Managing Director shall receive a gross salary of DM 185,500.00 per year as
               of January 1, 2000, in 12.5 equal installments reduced by statutory
deductions                payable on/or before the end of each calendar month.  






	(2)  	  	Moreover,
the Managing Director shall be eligible to receive an annual bonus of                a
certain percentage of his annual salary pursuant to the sales and bonus plan
               agreed between the parties at the beginning of each calendar year.  






	(3)  	  	The
Managing Director shall be furnished with a company car (at present DM
               1,425.00 monthly lease installments exclusive of VAT). Costs for
insurance, for                regular maintenance, repairs and gasoline, will be borne by
the Company, except                for the gasoline cost during the Managing Director’s
vacation time. The                Managing Director may use this car for private
purposes.  






	  	
The
Managing Director shall be obligated to pay tax on the pecuniary advantage resulting from
such private use and shall bear the tax burden resulting therefrom as determined by
German law.  






	(4)  	  	The
Managing Director shall be reimbursed all reasonable expenses and charges
               incurred by him within the framework of his activities for the Company and
               according to  



















6 








	  	
DATA I/O’s  policies or shall be reimbursed the lump-sums – per diem – which are
tax-free according to German-law. The Managing Director shall be obligated to submit to
the Company the vouchers and documents in support of expenses.  






Article 5 

Illness, Death 



	(1)  	  	In
case of serious illness or disability not due to his fault which           substantially
impairs the performance of the Managing Director’s duties,           the Managing
Director shall be entitled to receive continued payment of the           proportional
salary according to Article 4, paragraph 1 for three (3) months           following the
beginning of such illness or disability. This Agreement shall           remain in effect
during such three (3) month period.  






	  	
During
the next three (3) month period of serious illness or disability, this Agreement shall
remain in effect, but the Company shall not be required to pay the Managing Director any
salary. Thereafter this Agreement shall terminate if the serious illness or disability
continues.  






	(2)  	  	If
the Managing Director dies during the term of this Agreement, this Agreement
               shall terminate and his wife or, if he has no wife, his heirs shall
receive                continued payment of his remuneration for a period of one (1)
month after the                date of death of the Managing Director.  






Article 6

Holidays 



	(1)  	  	The
Managing Director shall have a right to holidays of thirty (30) working
               days.  






	(2)  	  	If
not all of the holiday claim is granted due to business reasons until March
               31 of the following year, the claim will be discharged by a payment of the
               Company. This payment will be based on the fixed salary according to Art.
4,                paragraph 1.  






















7 








Article 7 

Duty of Confidentiality 



	  	
The
Managing Director undertakes to treat all matters of the Company, DATA I/O and its
subsidiaries, such as trade and business secrets, know-how, production methods, design
and software developments and non-public financial, marketing and operating information
strictly confidentially and shall not disclose the same to third parties. This duty of
confidentiality shall survive the termination of this Agreement.  






Article 8 

Developments and Inventions 



	(1)  	  	The
Managing Director hereby grants the Company the exclusive right to use any
               and all technical, artistic and organizational developments. No special
               remuneration shall be owed for the grant of this right.  






	(2)  	  	The
above provisions shall apply mutatis mutandis to inventions of the Managing
               Director made by him in connection with the fulfillment of his contractual
               obligations or on the basis of developments of the Company.  






Article 9

Commencement and Term 



This Agreement takes effect on
December 23,1999 and shall be valid for an indefinite period of time. 



Article 10 

Termination 



	(1)  	  	Either
party hereto may give notice of termination of this Agreement subject to
               three (3) months’ notice with the notice of termination being
effective at                the end of a calendar month. The notice shall be in writing.  


















8 







	  	
A
 recall of the Managing Director shall be deemed a notice of termination by the
Company as well, with the notice being effective at the next possible date, and shall
also be in writing.  






	(2)  	  	Either
party shall have the right to terminate this Agreement for good cause                with
immediate effect; good cause shall include, but shall not be limited to  






	  	a)  	  	violation
of the duty of confidentiality pursuant to Article 7 or the           prohibition of
competition pursuant to Article 3 hereof,  






	  	b)  	  	the
Managing Director contravenes against directives of the advisory board           and/or
shareholders’ meeting of Company, the board of Directors of           DATA I/O
or the President of DATA I/O where such contravention has an           adverse
effect on the Company or DATA I/O.  






	(3)  	  	In
case that the notice of termination has been given, the Company shall be
               entitled to release the Managing Director from his work duties, with
unused                holidays to be taken into consideration and payment of remuneration
to be                continued for the periods as stated in Article 5 if the termination
is pursuant                to Article 5, and for the three (3) months’ notice period
if the                termination is pursuant to Article 10, paragraph 1. No remuneration
is to be                continued if termination is pursuant to Article 10, paragraph 2.
Provided the                Managing Director has executed an agreement and general
release acceptable to                the Company, as additional compensation for
termination of the Managing                Director’s employment by the Company
under Article 10, paragraph 1, the                Managing Director will be paid an
additional lump sum equal to five (5)                months of his then-current
salary and 5/12 of the sales incentive and                performance bonus he received
in the preceding complete year.  






	(4)  	  	The
Managing Director shall be obligated to return, on the day of termination
               hereof, or on the date when he is released from his duties pursuant to
Article                10, paragraph 3, whichever is earlier, all documents, models and
keys concerning                the Company together with all copies or duplicates thereof
and shall be                obligated to return, on the date of termination hereof, the
company car made                available to him.  






	  	
Insofar,
the Managing Director shall have no right of retention.  



















9 








Article 11 

Final Provisions 



	(1)  	  	This
Agreement has been approved through resolution of the shareholder. It shall
               replace all former agreements between the parties, which agreements are
               cancelled hereby.  






	(2)  	  	Modifications
of, supplements to and termination of this Agreement shall be                legally
valid only if in writing. This shall also apply to waiver of this clause
               requiring written form.  






	(3)  	  	The
parties hereto agree that German law shall be applicable.  






	(4)  	  	If
any provision of this Agreement is invalid or void, this shall not affect the
               validity of the remaining provisions hereof. In this case, the parties
hereto                shall be obligated to agree on a regulation which most nearly
achieves the                purpose of the invalid or void provision.  






	(5)  	  	Neither
of the parties shall assign or delegate or in any way transfer any                rights,
interests or obligations hereunder without the prior written consent of
               the other parties, except that the parties agree that this Agreement: (A)
shall                be transferred or assigned by Company to (i) an entity resulting
from any                merger, consolidation or other reorganization to which Company is
a party or                (ii) a buyer of all or substantially all of Company’s
assets relevant to                Company’s performance under this Agreement,
whereupon such assignee or                transferee shall succeed to the rights and
obligations of Company hereunder, and                (B) may be transferred or assigned
by Company to any entity in which Company has                a controlling interest or
which is under common control with Company, whereupon                such assignee or
transferee shall succeed to the rights and obligations of                Company
hereunder. Subject to the foregoing restrictions, this Agreement will be
               fully binding upon, inure to the benefit of, and be enforceable by the
parties                hereto and their respective successors and permitted assigns.  






IN WITNESS WHEREOF, the parties
hereto have hereunto set their hands the day and year hereinafter written. 




	
Date:  __________________, ________

Data I/O GmbH




By:       ________________________________


Title:    ________________________________
	


Harald Weigelt 



________________________________